Managed Care M&A Still in Recovery, According to New M&A Report from Irving Levin Associates

NORWALK, CT – November 8, 2012 – Over the last five-and-a-half years, the Great Recession, along with a general uncertainty regarding federal health-care reform, slowed activity in the Managed Care M&A market, according to Irving Levin Associates’ new report, The Managed Care Acquisition Report, Second Edition, 2012. During the five-and-a-half year period between January 1, 2007 and June 30, 2012, 2009 was clearly the worst for the Managed Care M&A sector in terms of transactions. Total dollar volume in that year hit a low of $856 million. One deal—United Health Group’s acquisition of Health Net for $510 million—made up more than half of that total. Clearly, the Great Recession and health care reform uncertainty put a virtual stop to the managed-care M&A activity in 2009.
In 2007, prior to the Great Recession, the dollar volume of Merger and Acquisition transactions reached almost $9 billion. In 2008, however, dollar volume was significantly less. While the number of deals decreased 43% from 2007 to 2008, dollar volume during that period fell almost 78%, with no large deals on the level of the earlier year.
The number of transactions each year and respective annual dollar volume, according to The Managed Care Acquisition Report, Second Edition 2012, are listed in the table below.

Managed Care Mergers and Acquisitions January 1, 2007 – June 30, 2012

Year

Number of Transactions

Dollar Volume of Transactions

2007

28

$8,847,000,000

2008

16

$1,982,000,000

2009

15

$856,000,000

2010

14

$4,200,000,000

2011

20

$7,900,000,000

2012 First 6 Months

11

$1,200,000,000

Dollar volume in 2010 and 2011 saw a marked increase over 2009, the result of a better economic outlook. The first half of 2012, however, did not replicate the results of 2011. Dollar volume through June 30, 2012, reached only $1.2 billion—mostly small deals in which companies are seeking to add services (e.g., dental, vision, or behavioral plans) to diversify their portfolios. Although not covered in this report, the third quarter of 2012 started off strong and the full year will top 2007.

The Managed Care Acquisition Report, Second Edition, 2012 is published by Irving Levin Associates, Inc. The new 2012 edition includes hard-to-find details on Managed Care M&A transactions such as price/revenue ratios when available, and more. The report was recently published and can be purchased at http://www.levinassociates.com/managed-care-description.

For more information on The Managed Care Acquisition Report, Second Edition, 2012 or for a subscription to any Irving Levin publication, call 800-248-1668 or go to www.levinassociates.com. Irving Levin Associates, Inc. was established in 1948 and is based in Norwalk, CT. This privately held corporation publishes research reports and newsletters, and maintains health care and seniors housing M&A databases.